Fiscal Integration in the Euro Area – Engineering, Ethics, and Political Economy
with Erik JONES, Professor of European Studies and International Political Economy, Johns Hopkins School of Advanced International Studies

In the framework of this research seminar, Professor Erik Jones will provide his views on the fiscal integration processes whithin the European Union.

Europeans have debated the role of fiscal integration in stabilizing monetary union since the 1970s. Most see the matter as an engineering problem. Their goal is to understand just how much fiscal integration is required for ‘stability’, and then to engineer an appropriate mix of institutions. Opponents of fiscal integration have objected to the institutions under discussion not because they are poorly engineered, but because they create adverse incentives. According to this perspective, democratic governments should be responsible for their own decisions, so should the investors and creditors. This cross-cutting debate forces us to reconsider what the ‘stability’ of a monetary union means in the first place. The question is whether we should focus more attention on the movement of macroeconomic aggregates and financial flows or on different national perceptions of those movements. If ‘efficiency’ and ‘legitimacy’ work at cross-purposes, which of the two aspects is more important? The experience of the United States shows just how difficult it is to answer that question.

BY INVITATION ONLYFor inquiries, please contact us at conferences@cepii.fr